Topic: How To Invest

Pat: Could you give me some comments on BlackPearl Resources? Thanks.

Article Excerpt

BlackPearl Resources Inc., $2.30, symbol PXX on Toronto (Shares outstanding: 335.6 million; Market cap: $772.0 million; www.blackpearlresources.ca), produces and explores for oil, mainly in Alberta and Saskatchewan. The company operates oil properties, but it aims to expand into oil sands production. BlackPearl’s main properties are Onion Lake, Mooney and Blackrod. Blackrod is a planned steam-assisted gravity drainage (SAGD) oil sands development in northern Alberta’s Athabasca region. Extracting the tar-like bitumen from oil sands is much more expensive than conventional oil wells, but new technologies like SAGD have lowered costs in the industry. SAGD systems inject steam into the ground to melt the bitumen, making it easier to pump to the surface. Right now, Blackrod is producing just 270 barrels of heavy oil a day, but BlackPearl believes the property has the potential for an 80,000-barrel-a-day SAGD development. Onion Lake is an oil-producing property in Saskatchewan’s Lloydminster area. Current production averages 3,915 barrels a day, but Onion Lake has the potential for a 12,000-barrel-a-day SAGD…